Key Points
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Analyst Gil Luria of DA Davidson recently upgraded his rating and price target on Palantir stock.
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The stock is pricey, but the company’s revenue growth has been extraordinary.
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Palantir occupies a unique position in the AI landscape.
- 10 stocks we like better than Palantir Technologies ›
Palantir Technologies (NASDAQ: PLTR) is having a down year after a strong multiyear run: So far in 2026, it’s off more than 20%. However, one analyst sees the stock having about 30% upside from here.
Earlier this month, analyst Gil Luria of DA Davidson upgraded the stock from neutral to buy and raised his price target from $165 to $175. Luria argued that Palantir has advantages over other software-as-a-service (SaaS) stocks, saying that more enterprises are realizing they need an AI orchestration layer like the one that Palantir has.
Luria also pointed out that building a solution using an orchestration tool that can switch out AI models is paramount, noting that it would have been disastrous for a company if it built a solution on top of an AI model that later got pulled from the market. This happened to Anthropic’s Claude Fable 5 and Claude Mythos 5 models, which the company pulled from the market after the U.S. government issued an order prohibiting anyone who was not a U.S. citizen from using them.
Is the stock a buy?
Palantir is one of the most interesting stocks in the market. It trades at a high premium, with a forward price-to-sales (P/S) ratio of 45.5 and a forward P/E of nearly 93.
However, the company has indeed created an important AI orchestration layer that helps reduce AI hallucinations and makes AI more useful for enterprise applications. It can do this because its solution can gather information from a variety of disparate sources and organize it into an ontology, which it then links to real-world objects and processes. The Palantir AIP (Artificial Intelligence Platform) can help customers across industries tackle a multitude of problems, which is why it has been attracting new customers and growing its sales to existing customers.
This was evident last quarter, when it grew its U.S. commercial revenue by an incredible 133%. Its customer count climbed by 42% year over year, while its net dollar retention was a remarkable 150%. That is the sign of a company whose products are resonating deeply with its customers, as these customers are rapidly expanding their spending with Palantir. The company also tends to have a rapid sales cycle, as it uses its AIP “boot camps” to help potential customers solve some of their actual problems within seven days, demonstrating the value of the product.
While the stock is not cheap, I think that, given Palantir’s unique position in the AI ecosystem, it has the potential to become one of the largest companies in the world over the next decade. As such, investors can consider buying shares during dips like those we’ve seen this year.
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
